Book Review: The Richest Man In Babylon by George S. Clason

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“The Richest Man in Babylon” is a book of short stories that teach financial lessons through parables set in ancient Babylon. The main character, Arkad, shares his advice on generating wealth and protecting and investing it through the “Seven Cures” and the “Five Laws of Gold.”

If you’re unsure about whether to read the book, this review will give you all the information you need to make a decision. So, let’s dive in!

Key Insights

Lesson 1: The key to building wealth lies in wise savings and investments

If you want to accumulate wealth, you need to know how to manage your money wisely. This doesn’t mean being overly thrifty or avoiding all expenses, but rather striking a balance between saving and investing.

The first step is to save money by cutting back on unnecessary expenses. While it’s okay to indulge in luxuries once in a while, it’s important to live within your means. This means skipping out on lavish vacations or expensive items you don’t really need. By saving on these little extras, you can accumulate a sizeable amount over time.

But saving alone won’t make you rich. You also need to invest your money in something that will generate more wealth. This could be stocks, government bonds, or even funding startups. The key is to find an investment that aligns with your financial goals and risk tolerance.

Of course, not all investments are created equal, and it’s important to invest wisely. Don’t trust just anyone with your hard-earned money – make sure you do your research and only invest with people or institutions that have a proven track record of success. You may even consider hiring a professional to manage your investments, such as a hedge fund.

By saving and investing wisely, you can set yourself on the path to financial freedom and accumulate wealth over time. It may take some time and effort, but the end result will be worth it.

Lesson 2: Recognise our own ignorance in finance

In the world of finance, it’s easy to think we know it all – or at least enough to make some smart investments. But as the ancient philosopher Socrates noted, true wisdom comes from recognizing how little we actually know.

Learning something new can often reveal even more areas of ignorance. This is especially true in finance, where even basic concepts like compound interest can be difficult to grasp for many adults.

Unfortunately, many people are unaware of their own ignorance and fail to seek out more information. This can lead to disastrous consequences, such as investing in risky subprime mortgages without fully understanding the potential risks.

By acknowledging our own ignorance and seeking out more information, we can gain a significant advantage in the world of finance. This can mean spotting investment opportunities before others do, or avoiding risky investments that others may be unaware of.

So if you want to succeed in finance, it’s important to embrace the fact that there is always more to learn. By staying curious and seeking out new knowledge, you can become a truly wise investor and build wealth over time.

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Lesson 3: Take small steps forward and learn from mistakes

Many people dream of becoming rich overnight, but the reality is that this is highly unlikely, except for the lucky few who win the lottery. Building wealth takes time and countless small steps forward, sometimes accompanied by setbacks. The reason for this is that the financial world is constantly changing, and nothing is certain. You can’t simply choose a strategy for building wealth, such as investing in a particular stock, and expect the money to flow.

To achieve financial success, you have to be able to adapt to new situations, experiment with new strategies, and be willing to fail. Just when you think you have found your next strategy for success, something big happens again, such as a stock market crash. Through this process of experience and adaptation, you will acquire more knowledge, which will enable you to invest smarter.

It’s similar to scientific progress through trial and error: failed experiments are just as valuable as successful ones. You can learn a lot from a failed investment, such as investing in subprime mortgages, and use that knowledge to invest successfully in the same area in the future.

However, it’s important to remember that trial and error inherently brings mistakes. If you don’t know something, don’t invest money that you can’t afford to lose in an area that you’re unsure about. It’s important to take calculated risks, but not to be reckless with your finances.

Lesson 4: Invest in your future to build up wealth

When we think of money, we often think of earning it – working hard, getting paid, and then using that money to buy things we need or want. But there’s a difference between earning money and gaining wealth, and it’s an important distinction to understand if you want to achieve financial freedom.

Earning money is important, of course, but it’s not enough to become truly wealthy. To gain wealth, you need to put your money to work for you. This means investing some of your earnings so that your money can grow over time.

One of the best ways to do this is by investing in real estate. If you can save some of your income and put it towards a down payment on a property, you’ll be able to start building equity in that property over time. This means that your money is working for you – as the property increases in value, so does your wealth.

Of course, gaining wealth isn’t an overnight process. It takes time and patience to build up your investments and see them grow. But the long-term benefits are worth it. When you’re no longer relying on each paycheck to make ends meet, you’ll have more financial freedom and security.

It’s also important to remember that unexpected things can happen in life – like losing your job or facing a financial emergency. That’s why it’s crucial to plan ahead and have a long-term financial strategy in place. 

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Lesson 5: Earning interest on investments is highly lucrative

When you borrow money, you have to pay interest, but when you lend someone money, they pay you interest. Interest is a way for people with money to make more wealth. Like any other resource, money needs to be paid for. If you want to start a business, you need capital, and you must pay for it.

Interest is a powerful tool for building wealth because it compounds over time. This means that you earn interest on top of interest, and your earnings increase over time. When you invest $100,000 in a new business and get back $110,000 (the original amount plus 10% interest) on the due date, you can re-invest the entire $110,000 into another business with the same terms. Over time, your money will work tirelessly for you, and your earnings will continue to grow.

The compounding effect of interest is like a snowball rolling down a hill, gaining momentum and becoming more efficient over time. By consistently reinvesting your earnings, you can turn a small investment into a large fortune.

Therefore, it’s essential to understand the power of interest and use it to your advantage. Whether you’re starting a business or saving for retirement, interest can help you achieve your financial goals.

Lesson 6: Opportunities create luck, unlike chance, which can be intentionally cultivated

Have you ever thought that some people seem to be luckier than others? While luck may seem random, it’s not always the case. In fact, luck can be earned through hard work and being prepared for opportunities.

For instance, let’s consider a scenario where you’re preparing for a tennis tournament. You practice regularly and perfect your techniques. During the match, your opponent can’t touch the ball as you hit the top of the net. Was it just luck? Not really. It was the result of your hard work and dedication to the sport.

So, how can you increase your luck? One way is to always be on the lookout for opportunities to improve and capitalize on them. Take the example of an entrepreneur who’s passionate about consumer technology. She spends time every day reading trend reports, analyzing the global financial situation, and connecting with innovators in her network.

When she hears about a new method for producing 3D TVs and realizes that they’re going to be the next big thing, she jumps on the opportunity and starts producing them. While others may see her success as a stroke of luck, it was actually the result of her vigilance and willingness to seize the opportunity.

Lesson 7: Avoid debt and make wise expense choices for financial stability

One of the biggest reasons why people fall into financial ruin is because they make irrational financial decisions. However, there are steps you can take to avoid this. Before you make any financial decisions, it’s essential to realistically assess your personal needs and your financial situation.

For instance, imagine you have your eye on a fancy new car that you really want, but you’d have to take out a large loan at unfavorable terms that you don’t really need.

If you decide to buy the car anyway, you could quickly find yourself in a debt spiral. You’ll spend most of your income paying off the interest, and you’ll eventually need to take out another loan just to pay off the first.

In general, going into debt is not a good idea because it prevents you from saving money to invest and build wealth. It also hurts creditors because it prevents debtors from growing their assets, leaving both parties financially unstable.

For example, during the recent eurozone crisis, Greece was heavily indebted to the European Central Bank. As a result, the country was unable to invest in essential areas like schools, infrastructure, and transportation, which would have benefited the economy in the long run. Without these investments, the country wouldn’t be able to repay its debt in full, leaving both parties worse off.

However, creditors can suspend payments in some cases to allow their debtors to get back on their feet. So, if you find yourself in debt, it’s essential to communicate with your creditors and come up with a plan to repay your debt in a timely and sustainable manner.

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1. Easy to Read and Understand

The book is written in the form of a series of fictional stories set in ancient Babylonian times. The stories are well written and easy to understand. The author uses simple language to explain complex financial concepts. The financial lessons are incorporated into the stories and repeated at various points throughout the book, making them easy to absorb and remember.

2. Timeless Financial Advice

The book offers practical and timeless advice on how to handle money. The author emphasizes the importance of saving and investing, working hard, seeking wise counsel, and never investing in businesses you are not familiar with. These are basic, well-proven tactics for building personal wealth, and they are still relevant today.

3. Great Starting Point

This book is a great starting point for anyone who wants to improve their financial situation. It provides a solid foundation for financial literacy and encourages readers to develop good money habits. It is especially helpful for teenagers and young adults who are just starting to learn about managing their finances.


1. Dated Language and Writing Style

The book is written in an old BC-like English style that may be difficult for some readers to follow. The writing style is modeled after religious texts, which can be off-putting for some readers. The author’s attempt to imitate this style often results in long and convoluted sentences that can make the book feel tedious to read.

2. Long and Unnecessary Stories

The book is structured as a series of fictional stories that illustrate the financial lessons being taught. While some readers may find this approach engaging, others may find the stories long and irrelevant. Some stories are full of irrelevant and self-indulgent details that detract from the main message.

3. Too Religious in Tone

The book’s tone is often dry and religious, which may not be appealing to some readers. The author injects opinions here and there, which can come across as preachy. The book would have been more effective if it had been written in a straightforward way, using regular English.


If you want to learn about managing your money and becoming financially literate, you should check out The Richest Man In Babylon. It’s a quick read at around 100 pages, but the language is a bit old-fashioned, so be aware of that if English isn’t your first language.

The book is structured like a collection of short stories, similar to the Bible. It’s important to note that there’s no “secret formula” to getting rich in this book. Instead, it teaches you the necessary steps to become responsible with your money. If you’re already very knowledgeable about finances, this book may not be for you.

The Richest Man In Babylon is ideal for young adults and those who are just starting their financial journey. Keep an open mind while reading and try to understand the knowledge and principles behind each story to get the most out of it.

About The Author

Businessman and author George S. Clason has been a prominent American for decades. The Richest Man In Babylon is a collection of pamphlets he wrote about financial success in ancient Babylonia, and the best of those pamphlets were later published together.

Buy The Book: The Richest Man In Babylon

If you want to buy the book The Richest Man In Babylon, you can get it from the following links:

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